Self‐Financing Highways: Franklin Roosevelt's Land Tax Proposal

President Franklin Delano Roosevelt (FDR) championed the public capture of land value increments as a method of financing an interstate highway system that was under consideration during his presidency. This Georgist method of public finance was a convenient option for him, not an ideological choice. FDR was likely familiar with Henry George's ideas, but his support for land‐based financing was pragmatic: broad‐based taxes would not be needed. For FDR, capturing land value increments to fund highways was a simple way to keep the cost of federal subsidies outside the budget, so it would seem that road‐building was “free” to the public. Unfortunately, this new funding scheme was attached to a public works project that lacked the sort of engineering plans required for a massive infrastructure program. The routes proposed were loosely drawn by hand by Roosevelt on a map of the United States. The nation was not ready to build an interstate highway system until the 1950s. But we can still learn lessons from the dream that Roosevelt had of building the system with a modified land tax.